A President On the Verge of a Political Breakdown

July 8, 2011

Richard Eskow

This isn’t the first time the White House has floated the idea of Social Security cuts as part of a ‘grand bargain’ with Republicans, and it’s not the first time there’s been a groundswell of opposition. But that opposition has never crystallized so quickly into something deeper and more threatening to the President’s political fortunes.

Liberal pundits are turning against him and Democrats on the Hill are taking the fight directly to him. With a new poll confirming that Social Security cuts would alienate the other side’s base and independents, this “grand bargain” doesn’t look like much of a bargain anymore.

Sen. Bernie Sanders already laid the responsibility for unpopular cuts squarely at the President’s feet on a phone call with reporters today: ” We thought Social Security was off the table,” said Sanders, “but by reopening this issue the White House is not only going to take on these changes, but will open the door to whatever else Republicans want.”

In other words: If something bad happens to Social Security, you own it, Mr. President.

The timing couldn’t be worse for a new austerity pose. Today’s jobs numbers show that we’re in an ongoing economic emergency. Yet instead of pushing for the spending that’s needed, the President keeps reinforcing Republican arguments instead. According to the AP he told reporters in the Rose Garden that “uncertainty over whether lawmakers will raise the nation’s debt limit is keeping businesses from hiring.” (What was keeping them from hiring before that?) Economic advisor Austan Goolsbee evaded the issue of badly-needed stimulus funding as well as anyone could – that is, not very well at all – while repeating that ill-advised ‘business confidence” mantra.

The net result is a Democratic Administration that’s either afraid to speak up for government’s role in fixing the economy or doesn’t believe it has a role. Most people disagree, according to the polls. Now it looks like the Administration seriously overplayed its hand with this Social Security misstep (or trial balloon, or a double-triple-fakeout, or whatever this story was). That leaves it with the dual challenge of walking the story back and at the same time repairing a frayed bond between the President and many of his supporters.

The political logic’s hard to fathom. Yet another poll was released this week confirming what we already knew: When voters are given a choice between reducing the deficit and maintaining benefits for Social Security and Medicare, they overwhelmingly choose benefits. Even today, after a relentless year-long drumbeat for austerity economics, 60 percent of Americans want these programs protected. That includes 72% of Democrats, which accounts for all the stories today about “Obama’s problem with his base.” But most Republican voters feel that way, too.

The controversy began two days ago with a Washington Post story that seems to have come from White House sources. That story was both definitive and, in keeping with the Post‘s ideological leanings, openly supportive of such a deal.[1] The White House only issued twisted non-denial denials like Press Secretary Jay Carney’s comment that ” while Social Security is not a major driver of the deficit, we do need to strengthen the program.” (It doesn’t affect the deficit at all.) That followed an earlier Carney remark that recycled the Administration’s evasive language about the President not wanting to “slash benefits.”

(That leads to another, parenthetical concern: Do they really believe that this kind of slippery politico-speak is good for the President’s image?)

The generally pro-Democratic pundits who serve as a political Distant Early Warning System for Obama’s base are signalling “DefCon 4″ over this latest maneuver. Ed Schultz, who can usually be relied upon to defend Obama’s left flank, said last night that Obama will be a “one-term President” if he makes a deal to cut Social Security. Paul Krugman’s now openly speculating that the President is secretly an economic conservative whose “compromises” actually reflect his own beliefs.[2]

This morning a coalition of 300 groups sponsored a phone call with Sen. Sanders and Sen. Sheldon Whitehouse. Eric Kingson, Co-Director of the nonpartisan group Social Security Works [3], called the proposal an “outrage.” Sen. Sanders was even more blunt about the political backlash if a “piece of crap” deal is sent to the Senate for approval. Sanders dismissed the chained-CPI proposal (Washington’s preferred benefit-cutting method) as “about politics and not Social Security,” and pointedly reminded the President of his own unequivocal pledge not to change the cost of living adjustment or raise the retirement age as McCain had proposed.

“Let me be clear,” candidate Obama said in 2008. “I will not do either.”

“Elections matter,” said Sanders pointedly. “What the candidates say matters.” To underscore his point, Sanders added that the President “made a promise to the American people. It is important that he keep his promise.” Sen. Whitehouse said he “worried that the White House was taking Senate Democrats for granted,” adding: “”I don’t know how strong a hand the White House needs to have to play poker with these guys.”

In two short days the tone of many private conversations among Democratic and progressive activists and leaders has turned from “how to we persuade the White House …” to “how do we defeat the White House.” This backlash could move beyond tactical or policy disagreements and begin to undermine the trust between Democratic voters and the White House.

Republicans won’t be thrilled, either. The”chained-CPI” calculation would also affect tax brackets, giving it the dual effect of dramatically cutting Social Security benefits while at the same time raising taxes on the middle class (but not the wealthy who are already in the top bracket.) The White House finally achieved that longed-for bipartisan consensus today, as lawmakers from both parties expressed their opposition to the chained CPI proposal . [4]

Some of the President’s new allies, like the business-funded and right-leaning Democratic group Third Way, are putting out the usual (decisively rebuttable) attacks on the President’s critics. The President’s position with the base will only get worse if he’s forced to rely on attack pieces from groups that represent the Lanny Davis/Joe Lieberman wing of his party.

The stakes couldn’t be higher for the President. The GOP’s pursuing a strategy that excites and energizes its base, while he pursues one that depresses and discourages his own. Obama’s approval ratings are still high among Democrats but, as Nate Silver demonstrates, next year’s election will hinge on turnout.

Silver’s piece is entitled “Why the Republicans Resist Compromise.” It doesn’t tell us why the President doesn’t – even, as in the case of Social Security, when compromise apparently wasn’t on the table.

The President and his team have a clear choice: They can either retreat from this position and fight aggressively for Social Security, or they can stake his re-election on a misguided roll of the dice. Those are the only two options. In politics, as in life, sometimes there’s no “third way.”

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[1] From the Post: “The White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages. That would represent a major legislative achievement …”

Who would consider that “a major legislative achievement,” besides the reporter herself? We’re not told. Who has determined that an aging population of one of our two “biggest budgetary time bombs” – as opposed to unemployment or slow growth, for example? We’re not told that, either.

[2] The “closet conservative” theory may sound conspiratorial, but there’s some evidence for it. The President’s key – and now apparently only – economic advisor is former Republican Tim Geithner, who has been a hardcore fiscal conservative throughout his tenure. (The non-ideological explanation for some of the White House’s actions is that they’ve made a number of false moves that only coincidentally benefited economic conservatives.)

[3] This post was produced in conjunction with Strengthen Social Security and Social Security Works.

[4] The link takes you to a Bloomberg story that accurately reflects lawmakers’ positions but makes a clear misstatement of fact. It says that “the ‘chained consumer price index’ has been endorsed by economists, who say the current inflation measure exaggerates how much prices increase.” Many economists feel the current inflation measure understates the cost of living for seniors, and even the “chain gang’s” own economists don’t argue that it’s a better measure of “how much prices increase.” They base their proposal on changes in buying patterns that result from those price increases. (More on the chained CPI argument here.)